Older Bogleheads: What was the most expensive decade of your life?

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Ed_Sandwich
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Older Bogleheads: What was the most expensive decade of your life?

Post by Ed_Sandwich »

I am in my late 30s and have found that the amount of money we spend each month is incredibly high. We have two young kids and a mortgage in a HCOL area. We are not big spenders at all, and rarely buy anything frivolous, but the numbers seem to keep growing. Is 30-40 age range just very expensive?

Obviously we are looking forward to daycare ending and public school, as that is our biggest expense, even more than our home.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by twh »

I empathize with your question. I might propose an alternative, most expensive isn't the same as most expensive relative to assets or disposable income. You are in the time of your life where it is real hard to save. Careers are still young, kids, daycare, new house, 2 cars, etc. It is real hard to save right now. Do the best you can and don't raid the retirement accounts for non-emergencies.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Normchad »

By actual dollars spent, my 40s were the most expensive.

My 30s though, felt the tightest. Young family, growing expenses, still getting established professionally, etc.

In the 40s, I was earning more, and a lot if one time expenses were behind us. So we bought a bigger house, took nicer vacations, spent a lot of kid activities I, etc. but that is all discretionary. I had lots of margin for error, whereas in my 30s, I really didn’t.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Sandtrap »

1. Ear.y/Mid: When my companies were just launched, expenses were huge with not much comparatively coming in.
2. For the lst 5 years after retirement during and after relocation.

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mike@jb
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by mike@jb »

My forties were the most expensive. They were also my peak earning years.
We got two kids through high school and college, had four cars in the driveway and took some great vacations.
Both kids were out of college and working when I was 50!
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by BrooklynInvest »

Fun question.

In absolute terms, my forties were my most expensive. Large mortgage in HCOL area and two good incomes. Some of which went to fun stuff and nice travel.

Relative to income, my 20s were by far the most expensive, even driving a very used Chevy Nova and living in "quirky" apartments for the most part. In my early 50s, I said hello to my son and goodbye to a large mortgage ;-)
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by David Jay »

The college years. I funded much of my children’s college expenses.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by HomerJ »

Things get easier when the kids go off to school.

My kids are spread out.

My most expensive years was when they were 18 and 12 and 2.

Was paying for college, braces, and child-care all at the same time!

Although I was happy to only pay for college one kid at a time. Never had 2 in college at the same time, like some families.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by H-Town »

Ed_Sandwich wrote: Tue Dec 07, 2021 12:30 pm I am in my late 30s and have found that the amount of money we spend each month is incredibly high. We have two young kids and a mortgage in a HCOL area. We are not big spenders at all, and rarely buy anything frivolous, but the numbers seem to keep growing. Is 30-40 age range just very expensive?

Obviously we are looking forward to daycare ending and public school, as that is our biggest expense, even more than our home.
I'm just in my mid-30s. Relatively to income, it has to be my college years. I worked multiple jobs and spent most if not all of my income on tuition, books, and food.

Once I got my first big boy job, my expense increase a bit (mortgages and whatnots), but I save a lot of money. Since then I'm able to keep similar level of expense so far. I think by controlling housing and car expenses, my expenses are not inflating over years.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by twh »

David Jay wrote: Tue Dec 07, 2021 1:29 pm The college years. I funded much of my children’s college expenses.
That may be true in absolute dollar terms, but not cash flow terms. I funded all of the college expenses, but my pay was so much more that it was pretty easy to do.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Wricha »

In absolute dollars, my 60’s (still not over). Bought 2 large houses, several cars, boat and gave away large sums. Probably spent more (personally) in my 60’s then the previous 2 decades combined. I will also say that as a precent of net worth is was about 10%-15-% so not to crazy.

From a business perspective late 40’s early 50’s by a long shot. Borrowed significant amount of cash (commercial real estate debt).
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Colorado14 »

I'm hoping it's my 50s, as I have dreams of extensive retirement travel. However, the pandemic is putting quite a damper on travel plans. Hopefully that will not be the case for much longer. Fingers crossed...
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by BernardShakey »

In raw dollars it will be my 50's due to college and graduate school expenses for my kids. As a percentage of income, probably still my 50's as income has been higher but education costs have been substantial. Looking forward to the lower cost 60's!
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by phxjcc »

"Expensive": definition?

If you mean the total outflows of cash....60's.

However, if I was answering..."What was your best year for increase in Net Worth?", I would also say: "60's".

Its that Real Estate 'thang'. :beer

If you meant "what was the worst decade for net worth?" 20's.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by cheese_breath »

70s due to DW's medical expenses.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Stinky »

Ages 47 to 54. Funded 15 years of college during that timespan.

Cash was literally flying out the door. All to state schools, but still expensive.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Grasshopper »

For me the 60's retired at age 54 after years of accumulating wealth. Than started spending on experiences instead of things. Travel spending before covid was our biggest expense, and I am so grateful to travel while I was able.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by jebmke »

50s; income taxes were highest decade for us.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by lthenderson »

Every decade I come to has been the most expensive decade. When I was younger, I didn't spend as much dollar wise but it was a much larger percentage of my income. As I got older, I have spent a lot more though it has become a much smaller portion of income and a tiny portion of savings. I hope in my full on retirement years when the kids have flown the nest will be the most expensive years yet as I attempt to blow through all those savings.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by MaxDakota »

In absolute dollars, every year is more expensive than the last as our income is making leaps and bounds and we have the tax bill to back that up.

But ratio of expenses to income, our 20s were the tightest. As we have had kids and purchased homes, our expenses have gone up, but our income has gone up faster.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by cbs2002 »

My most expensive decade is 40s with kids, and it isn't over yet :? While you may see a dip once you get out of the day care years, if the kids get into costly activities it can creep up steadily even if you have them in public school. And then comes college.

I try to focus on value for money rather than absolute dollars spent to keep myself sane. Some costs that seem absurd to me are for experiences I'm really glad my children can have.

Like others here, saving took a backseat for the first decade of our family life but we have made up for it before and after.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by delamer »

It’s going to be whatever decade your kids are in college, if you are paying for college.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by H-Town »

I'm guessing divorce in 40's or 50's would be the most expensive, right?
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Kenkat »

delamer wrote: Tue Dec 07, 2021 4:42 pm It’s going to be whatever decade your kids are in college, if you are paying for college.
This. Plus add on car expenses, car insurance, phones for the kids…
Last edited by Kenkat on Wed Dec 08, 2021 7:45 am, edited 1 time in total.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by MikeWillRetire »

My wife and I both work. In our 30's, daycare was expensive. In our 40's we found that the local private school tuition was similar to the daycare costs. In our 50's, we found that the local university tuition was about the same as the private school tuition. So our 30's, 40's, and 50's were about the same!
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by UpperNwGuy »

The years in which the kids were in college, which unfortunately coincided with a divorce.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by hicabob »

H-Town wrote: Tue Dec 07, 2021 4:46 pm I'm guessing divorce in 40's or 50's would be the most expensive, right?
Yup - an even million which hurt at the time but was fair.
I built back better though! I had the fortunate confluence of a very large (for me) income, well priced stock market, wanting to invest and knowledge of index etfs. :happy
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by shorty313 »

Normchad wrote: Tue Dec 07, 2021 12:50 pm By actual dollars spent, my 40s were the most expensive.

My 30s though, felt the tightest. Young family, growing expenses, still getting established professionally, etc.

In the 40s, I was earning more, and a lot if one time expenses were behind us. So we bought a bigger house, took nicer vacations, spent a lot of kid activities I, etc. but that is all discretionary. I had lots of margin for error, whereas in my 30s, I really didn’t.
Mid forties right now, and other than the upgraded house this is just how I feel. In another 4 years we will have college to contend with so I suspect things will feel more pinched as we cash flow some.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Watty »

Older Bogleheads: What was the most expensive decade of your life?
I don't have any numbers to look back through but as far as money being tight I have been pretty steady over the years.

I bought my first house when I was single and about 30 in the 1980s. I stayed in it for a long time and when I moved cross country for a job I bought a comparably priced house in the city I moved to.

Inflation had dropped from double digits when I bought my first house but my first mortgage was at 9.75%. Inflation still probably averaged at least 4% for the next decade so after 10 years my relative mortgage payment was a lot lower. The actual math is more complicated but roughly speaking 10 year of 4% inflation will make a fixed mortgage payment something like 40% more affordable.

I had also refinanced several times as mortgage rates dropped so my actual mortgage payment was also lower each time I refinanced.

A couple of years after I bought the house I got married and had a kid so the costs associated with child raising more or less balanced out with my housing cost savings due to inflation. I was also progressing in my career and making a bit more money through my 30s.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by CyclingDuo »

Ed_Sandwich wrote: Tue Dec 07, 2021 12:30 pm I am in my late 30s and have found that the amount of money we spend each month is incredibly high. We have two young kids and a mortgage in a HCOL area. We are not big spenders at all, and rarely buy anything frivolous, but the numbers seem to keep growing. Is 30-40 age range just very expensive?

Obviously we are looking forward to daycare ending and public school, as that is our biggest expense, even more than our home.
Having more than one child at a time in college/graduate school. Those were expensive years due to multiple cars, insurance, tuition/room/board, etc... . In our case - age wise - we were in our 50's.

The empty nest years that follow come as a welcome relief for many parents.

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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by bltn »

delamer wrote: Tue Dec 07, 2021 4:42 pm It’s going to be whatever decade your kids are in college, if you are paying for college.
Absolutely. In my case my kids are 7 years apart. From my early 50 s to my mid 60 s I funded 8 years of college at expensive private schools, and 8 years of medical school, all of which are expensive. And I subsidized 3 years of graduate school. During that time, I also built a second home. Thinking about all of that now, I m surprised I could retire!!
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by invest4 »

The decade with kids in high school and college.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by RudyS »

We were fortunate in our earlier years in being able to "live below our means." Meaning, fairly inexpensive house and cars in a LCOL area. Kids went to good state school. But the answer to the question is it's my 80's. One year involved huge buy-in for a CCRC as well as large monthly fees.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Parkinglotracer »

Kids in college was for us

Spent about 200K in 7 years

Glad we were able to do it
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by AnnetteLouisan »

50s now. Other than the year I bought my apt outright, and my student loan payoff years, my 30s were the most expensive due to travel, dining, spas, clothes and high Manhattan rents.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by ColoradoRick »

mike@jb wrote: Tue Dec 07, 2021 1:08 pm My forties were the most expensive. They were also my peak earning years.
We got two kids through high school and college, had four cars in the driveway and took some great vacations.
Both kids were out of college and working when I was 50!
+1!! :D :D

Biggest raise in my life was at age 50 both when both
were out of college and left the nest. Wife cried, I clicked my heels being the jerk that I am.!
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by fourwheelcycle »

If you are married, with young children, your thirties seem expensive because day care, children's clothing, and furnishing children's bedrooms are expensive, and your finances are tight because you are just starting your career and your income and savings are lower than they will be in your forties and fifties. However, I would say the years you are paying for your children's college expenses, if you pay for their college expenses, will be the most expensive decade of your life.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Zeno »

mike@jb wrote: Tue Dec 07, 2021 1:08 pm My forties were the most expensive. They were also my peak earning years.
We got two kids through high school and college, had four cars in the driveway and took some great vacations.
Both kids were out of college and working when I was 50!
+1

Same for us. 40’s (so far) because of putting two kids through college, plus we accelerated mortgage payments during that decade. So by age 50 the kids were out of the house, and we were debt free.

When we dropped our last child off at college, we immediately thereafter went to Disney World. No joke. When we checked in, they asked “What are you celebrating? Anniversary? Birthday?”

We answered “We are here to party because the last child is now out of the house.”

There was a moment of stunned silence, plus Disney World didn’t have a welcome check-in gift for that specific occasion.

My peak earning year was in my 40’s as well. I hit it right before the unpleasantries of 2008.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Wanderingwheelz »

We are spending less at 46/50 than we ever have during our 20 years of marriage. Once you have everything you need, including a paid off house and kids fully educated, then expenses plummet.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by JackoC »

As usual inconsistent answers based on definition make comparisons questionable. Stuff like how to treat houses, income taxes, gifts of investments to kids etc. My 30+ yr complete record of spending does not include income taxes as 'spending' which would make no sense IMO*, nor house purchase** nor gifts to kids of financial assets if they haven't sold them***. By that count ages 50-59 were around 8% higher on average than the incomplete decades of the 60's, 6% higher than 40's average, all in same year $'s per CPI-U. The reason was more college costs in 50's, but other things tended to fill in the gap before and after. 30's was much lower excluding one time house purchase. 20's, even after we got married and had little kids, was certainly much lower than 30's though I no longer have the records. We were absolute $ frugal in 20's and into 30's because we had to be, later on not because we no longer had to be.

*at high income and big savings you'd still automatically be a 'big spender' in absolute $'s via income taxes you have no control over without spending, in the common sense meaning of the word 'spend', a dime. :confused
** in contrast to income taxes I could see different legitimate answers here. We bought our house for cash in our 30's but I did not put that in the 'spending' spreadsheet. Property taxes and other running costs have always been included though non-cash owner imputed rent also not included.
***gifts of cash and financial asset gifts I've told them to liquidate, are included. Financial asset gifts I've suggested they not liquidate, suggestions they've always followed, are not included.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by AlohaBill »

My wife had 4 kids in 3 years from 1981 to 1984. That was very expensive relative to what we were making.
College years (undergrad and grad) were interesting but the boys got loans and grants. Fortunately, they are all professionals.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by nigel_ht »

Ed_Sandwich wrote: Tue Dec 07, 2021 12:30 pm I am in my late 30s and have found that the amount of money we spend each month is incredibly high. We have two young kids and a mortgage in a HCOL area. We are not big spenders at all, and rarely buy anything frivolous, but the numbers seem to keep growing. Is 30-40 age range just very expensive?

Obviously we are looking forward to daycare ending and public school, as that is our biggest expense, even more than our home.
Ours is a little later but corresponds with kids. There was a little break between daycare and when we started paying for piano, ballet, travel soccer, etc. It adds up especially if they get competitive.

We bailed out of travel soccer (which was cheaper than travel hockey OMG) but unfortunately/fortunately both ended up doing well at TKD and dance competition so travel games got replaced by major competitions and nationals…

Worth it in our opinion if you can afford it but not required.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by remomnyc »

We have one in college now ($80k/yr) and will have two starting in 2023 ($160k/yr), but these years don't feel as expensive as my mid-30s to 40s because that's when the money for college was saved in 529 accounts. Those were the most expensive years because we had two in childcare, a mortgage, and were saving in 529 accounts.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by capran »

It might be a comparison of apples to oranges, since when we were young, day care was still very, very cheap. (70's through the mid 90's). For us (I'll be 70 this coming summer) the 60's have been the most expensive. In terms of what has been so expensive, our annual federal income tax has reached a peak of over 25k per year this year. (by over sheltering, our taxes during our working years we often under 10k). Our youngest decided to go to grad school which we funded (about 60k for a three year part time program) and we had been traveling more pre pandemic.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by dewey »

David Jay wrote: Tue Dec 07, 2021 1:29 pm The college years. I funded much of my children’s college expenses.
+1
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Ependytis »

For me, the most expensive decade of my life so far was mid 30s to mid 40s.The reason is, that when my son was born, child care was super expensive. Surprisingly, college expenses were relatively cheap. In California, for a community college it was roughly $3000 per year and for a Cal state school it was roughly $6000 per year. Again childcare was more than this especially relative to what I made.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by K72 »

dewey wrote: Wed Dec 08, 2021 3:42 pm
David Jay wrote: Tue Dec 07, 2021 1:29 pm The college years. I funded much of my children’s college expenses.
+1
+1

Started 529's way too late and ended up funding 8 years of college expenses (2 kids x 4 years) by selling stocks and using current income. Very big expense period, especially the year they overlapped.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by VictorStarr »

A decade between 45 and 55:
- we bought a multi-million dollar home in a super VHCOL, it was the simplest way to send kids into great K-12 public schools. Real estate taxes were comparable with median income in the US
- three kids with youngest in expensive child care and oldest in university
- supported our parents back in the motherland
- funded 529 plans for two younger kids
- paid for multi weeks trips around the world, the best money we spent

At that time we felt stressed being squeezed in the sandwich supporting three children, our parents and other relatives.

The most expensive year was when we divorced and my net worth halved.

The good news is my two younger children are in college and all their essential expenses are funded by 529 plans, I do not need to own prime real estate in the Bay area, my expenses plummeted and my compensation keeps growing.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by celia »

A lot depends on how your kids are spaced out age-wise, in my opinion. Ours ranged in ages over 10 years so they were never in day care or college at the same time.

Our situation won’t apply that much to others but our most expensive years were after they left home (adults) except for the youngest who was very talented AND knew exactly what career s/he wanted. This one went to an expensive private college and had grants and scholarships, but we still paid a lot partly because of on-campus housing for 4 years. We were stuffing as much as we could into retirement accounts at the same time (if you call that an expense), so I say the decade before we retired was the most expensive.

But when we had 2 in full-time day care and our income was less, that probably had the highest ratio of expenses to income (where our income was lower than our final working years). When they went to faith-based K-12, the tuition was less than day care, but we still needed a few hours of day care after school got out. So the total costs remained about the same.
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Re: Older Bogleheads: What was the most expensive decade of your life?

Post by Padlin »

The college years. In our case it was 1997-2004, age in the 40's.
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